Welspun's margin improves year on year, but profit halves sequentially
Costs grew faster than revenue sequentially, while the collapse in other income and a higher tax rate reduced reported profit.
Filed 29 Oct 2026, 14:31 IST · Welspun Corp Ltd (WELCORP)
Key takeaways
- Consolidated operating margin improved 2.13 percentage points year on year as revenue grew 6.18% while expenses rose 3.56%.
- Sequential net profit fell 52.75% because other income dropped 85.87% and the tax rate increased 11.29 percentage points.
- Operating margin of 15.65% remained 3.57 percentage points above the 12.08% median of 61 reported Industrials peers.
Price around the results
Year-on-year operating improvement, sequential profit reset
Welspun Corp's consolidated operating profit rose 22.95% year on year, ahead of 6.18% revenue growth, lifting operating margin by 2.13 percentage points. Sequentially, revenue grew 13.79%, but net profit fell 52.75% as the prior quarter's unusually high other income declined 85.87%. Other income still contributed 14.76% of current-quarter pre-tax profit, so reported earnings were not driven entirely by operations.
Costs diluted the sequential margin gain
Expenses increased 15.59% sequentially against 13.79% revenue growth, narrowing operating margin by 1.31 percentage points to 15.65%. Interest expense fell 14.98% sequentially, but the tax rate rose 11.29 percentage points, limiting the benefit to net profit. Depreciation also increased 3.94% sequentially and 53.79% year on year.
Margin is above peers but below the June peak
The current margin is above the 12.08% median for the 61 Industrials peers that have reported, with a 3.57 percentage-point gap. The quarterly trend shows a recovery from 11.68% in Q4FY26 to 16.96% in Q1FY27, followed by the current-quarter easing to 15.65%; this is a sequential pullback rather than a third straight quarterly decline. Year on year, margin remains higher than the 13.52% recorded in Q2FY26.
Management maintains FY27 EBITDA guidance and outlines capacity plans
Management said it maintained full-year FY27 EBITDA guidance of Rs 2,850 cr after H1FY27 EBITDA grew 30% to Rs 1,538 cr. It said demand visibility was strong in the USA and the Middle East, and outlined a planned 225 KMTPA US spiral-pipe facility costing US$115 million. The company also described a planned Jordan spiral-pipe and coating plant costing US$125 million through a joint venture, while flagging severe stress in the domestic Indian water market.
Past result-day reactions have been evenly split
Across the last eight results, the stock rose four times and fell four times, with a median absolute move of 3.96%. The recorded moves ranged from -3.96% to +10.00%, indicating that the stock's post-results response has varied materially rather than following a consistent direction.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,644 cr | ₹4,081 cr | +13.79% | +6.18% |
| Other income | ₹97 cr | ₹685 cr | -85.87% | -26.14% |
| Expenses | ₹3,917 cr | ₹3,389 cr | +15.59% | +3.56% |
| Operating profit | ₹727 cr | ₹692 cr | +4.97% | +22.95% |
| Operating margin (%) | 15.65% | 16.96% | — | — |
| Interest | ₹38 cr | ₹45 cr | -14.98% | -22.22% |
| Depreciation | ₹129 cr | ₹125 cr | +3.94% | +53.79% |
| Profit before tax | ₹656 cr | ₹1,207 cr | -45.69% | +11.40% |
| Tax | ₹160 cr | ₹159 cr | +0.78% | +10.70% |
| Net profit | ₹495 cr | ₹1,048 cr | -52.75% | +11.63% |
| EPS (₹) | ₹18.91 | ₹39.68 | -52.34% | +13.23% |
Operating margin of 15.65% compares with a Industrials sector median of 12.08% across 61 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company maintains full-year FY27 EBITDA guidance of Rs. 2,850 crore.
- The company sees strong demand visibility in the USA and the Middle East.
Expansion
- Welspun plans to add a 225 KMTPA spiral pipe facility in the USA at a cost of US$115 million.
- Welspun plans a greenfield spiral pipe and coating plant in Jordan through a JV with Perma Pipes Inc.
- The Jordan plant will cost US$125 million and be funded approximately equally by the two partners.
New orders
- Welspun received a US$412.5 million HFIW pipe order for its newly upgraded Little Rock mill.
New products
- Sintex launched RenoX, its first 10-layer tank, in selected Indian markets.
Problems & risks
- The domestic Indian water market is under severe stress.
- The company says the geopolitical situation in the KSA needs to be watched closely.
What to watch
- Whether operating margin holds above 15.65% after expenses grew 15.59% versus revenue growth of 13.79% sequentially.
- Progress against management's full-year FY27 EBITDA guidance of Rs 2,850 cr.
- Whether other income remains a material contributor after accounting for 14.76% of current-quarter pre-tax profit.